The politics of the newly established republic were guided by the Lao People’s Revolutionary Party (LPRP; called the Lao People’s Party until 1972), the communist party of Laos. Its Politburo was dominated by a small cohesive band of revolutionaries who had founded the party in 1955 and had engaged in persistent revolutionary activity until their takeover in 1975. These leaders had a long and intimate relationship with their Vietnamese communist allies. Prior to founding the party, they had been members of the Indochina Communist Party. Most spoke Vietnamese, and some had family ties with Vietnam. The party’s general secretary, Kaysone Phomvihan, had a Vietnamese father; second-ranked Nouhak Phoumsavan and third-ranked Prince Souphanouvong had Vietnamese wives. Their worldview had been shaped by their shared revolutionary struggle with Vietnam. Moreover, the Vietnamese had numerous channels—party, military, and economic—through which they directly conveyed their influence. Thus, the new state was intimately linked to Vietnam and closely followed that country’s policy line until the late 1980s.

In the early years of the LPDR, the leadership declared its twin economic goals to be “socialist transformation with socialist construction.” Following the Vietnamese communist model, the party leaders attempted to create agricultural collectives in the countryside and to nationalize the limited industry and commerce in the towns. Former members of the Royal Lao Army and of the deposed government—perhaps as many as 30,000—were incarcerated in “reeducation” camps. These and other repressive political measures and the grim economic conditions in Laos compelled some 10 percent of the country’s population to flee across the Mekong River to Thailand after 1975.

As LPRP leaders consolidated their revolutionary victory by the end of the 1970s, they implemented limited policies of economic and social liberalization. In 1986 they inaugurated a major reform called the New Economic Mechanism (NEM), which followed the introduction of perestroika (“restructuring”), a similar economic reform program in the Soviet Union. The NEM introduced market incentives and began decentralizing government economic enterprise. With the collapse of communist regimes in eastern Europe and of the Soviet Union itself in the late 1980s and early ’90s and the implementation of economic reforms under the doi moi (“renovation”) initiative in Vietnam, Laos moved more rapidly to open its economy. Private investment and joint ventures were encouraged, and, to the relief of Lao peasants, attempts at collectivizing agriculture were abandoned in favour of family-operated farms. The ruling party retained unchallenged control, curbing any attempts at organized opposition. Nevertheless, there was some enlargement of political freedom and participation. A new constitution was promulgated in 1991. Citizens were permitted to move about their country more freely and even to cross the Mekong to Thailand with fewer impediments.

Kaysone was elevated to heroic status following his death in 1992. Nouhak succeeded Kaysone as paramount leader, serving as president until forced by illness to resign in 1998; Gen. Khamtai Siphandon, a veteran revolutionary and (from 1991) prime minister, then moved from the premiership to the presidency. Although Khamtai oversaw further economic liberalization, he resisted political reforms. The LPRP continued to control the National Assembly, allowing few independents to contest elections. At the same time, the exiled Laotian royal family began to assume a higher profile, calling for a referendum to reestablish the monarchy; though the government generally stifled any dissent and threat to its rule, it took a measured response, particularly because of a growing reverence among ordinary Laotians for the Thai king.

By the mid-1990s Laos was experiencing significant economic growth, with per capita GNP rising gradually—if from a very low base. The country had replaced aid from the Soviet Union with more substantial assistance from Japan, western Europe, Australia, and other bilateral donors, as well as from international organizations (including the World Bank and the International Monetary Fund). In addition, neighbouring Thailand became by far the largest source of foreign investment. In 1994 a bridge opened between Thailand and Laos across the Mekong River at Vientiane, paving the way for greater trade between the two countries and symbolizing a political realignment for Laos away from its colonial and Cold War ally Vietnam; a second bridge across the Mekong between the two countries, farther downstream, officially opened in 2006. To diversify the economy, which depended heavily on the export of electricity (in addition to financial aid), the government began to open up Laos to visitors by developing tourism. Despite adopting such economic reforms, however, Laos continued to wrestle with underdeveloped fiscal and planning organizations, a weak central bank, and fragile financial institutions.

In 1997 the country realized its longtime goal of becoming a full member of ASEAN (Association of Southeast Asian Nations). However, its economy was subsequently damaged by the Asian economic crisis of the late 1990s. The kip (the Lao currency), closely linked to the Thai baht, plummeted in value by more than 75 percent, and inflation soared. Business investment, primarily from Thailand and Malaysia, declined, and Lao exports to its neighbours diminished. Although the Thai and Malaysian economies recovered in the early 21st century, Laos’s economic growth remained slow-paced.

The LPRP continued in the early 21st century to rely on leaders who participated in the revolution prior to 1975, even as the ranks of those senior officials were increasingly depleted by old age and illness. By 2000 most members of the Politburo, largely former military officers, were already over age 70. Throughout shifts in membership and leadership, however, the party has maintained a remarkable level of cohesion in the Politburo, with steady promotion in rank closely associated with longevity.

Laos’s foreign policy has undergone significant alteration since the collapse of the Soviet Union and of communist regimes in eastern Europe, but important continuities have remained. The government has retained its official commitment to Marxism and Leninism and has expressed fraternity with its two communist neighbours, Vietnam and China, both of which have continued to exert substantial political and economic influence on Laos. At the same time, Laos has expanded its economic reliance on the industrialized West and on Japan, and it has continued its formal association with the Francophone community of countries. However, the number of Laotians who speak French has been diminishing rapidly as the older generation—whose elite were educated in French—passes from the scene and English becomes the country’s second language. Many in the old guard of the LPRP and National Assembly have continued to support closer relations with Vietnam, while younger members have steered more toward China, and proponents of greater economic and political reform have looked toward Thailand and the West.

The Lao People’s Democratic Republic, or Laos, is a landlocked country of Southeast Asia. The former kingdom lies entirely within the tropics and occupies a rugged central strip of the Indochinese peninsula, surrounded by Vietnam on the east, Cambodia on the south, Thailand on the west, Myanmar on the northwest, and China on the north. Vientiane is the capital (see Vientiane, Laos). Area 91,429 square miles (236,800 square kilometers). Population (2015 est.) 6,918,000.